New entrants to benefit from education legislation changes: FAAA
FAAA chief executive, Sarah Abood, believes legislative changes regarding education qualifications could help new entrants to the profession.
Yesterday, it was announced that the government had passed the experience pathway which will help advisers stay in the industry if they have 10 years’ experience without the need for an approved degree.
The legislation will view an adviser as having met the education requirements if they have 10 years of experience between 1 January 2007 and the end of 2021, and a clean compliance record although they will still need to complete the financial adviser exam.
However, another part of the legislation in the Treasury Laws Amendment (2023 Measures No.3) Bill clarifies improvements to the courses required of new entrants.
Schedule 2 of the bill amends the Corporations Act to enable greater flexibility for a new entrant to demonstrate they satisfy the conditions of an approved qualification. This is achieved by amending the Minister’s current power to approve qualifications through a determination.
New entrants with a domestic qualification may apply to the Minister for individual approval, where that person has completed an approved qualification, as determined by the Minister in the approved qualifications determination, but not met all the conditions attached to that qualification.
In addition to approving relevant qualifications and imposing conditions for each of those approved qualifications, the Minister may also provide flexibility to new entrants by approving one or more ways to satisfy the conditions.
“This flexibility enables the Minister to determine alternative ways for a potential new entrant to demonstrate that they have substantively met the conditions for an approved qualification, where this is not evident from that person’s course transcript,” the document said.
“For example, subject to passage of this Bill, the Minister may amend the Approved Qualifications Determination to enable a person to satisfy condition(s) by providing written confirmation from their course provider that they have substantively met the conditions for the specified approved qualification.”
Abood said: “The legislation includes some improvements in the currently extremely prescriptive rules that control what courses new entrants to our profession are required to complete.
“Students will now have the ability to have their studies reviewed and potentially approved via Treasury if their units do not exactly match the determination. This is a critically important concession; we need many more advisers entering our profession, and we don’t want to be putting artificial barriers in the way! Students should no longer need to repeat courses, at great cost in time and money, if they have effectively mastered the content already.”
Regarding the experience pathway, Abood said she hopes it will let advisers focus on the future of their profession.
“It is good that the experience pathway issue has been resolved. It has been subject to debate since late 2021, leaving many advisers unsure of their future in the profession. We welcome the recognition of the experience of long-serving financial advisers.
“Now that this important matter has been resolved, advisers have clarity on what they need to do to remain part of this important profession and we can all focus on the future of our profession and servicing clients.”
AUTHOR
Laura Dew
Recommended for you
Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand.
The third quarter of 2024 saw the first positive increase in adviser numbers for 12 months, according to the latest quarterly Musical Chairs report, with new entrants overwhelmingly choosing to join privately owned firms.
As more advisers review their fee structures, Business Health has shared six steps to calculating the price to deliver financial advice services in a profitable yet suitable way.
ASIC’s Sarah Court has confirmed the regulator is carrying out systematic work on providers of unlicensed advice but admits it is a case of “whack-a-mole” when it comes to disciplining them.
Well, what a mess. How will this be reviewed & approved for new entrants on individual basis given the time it takes to do so? Sounds like a massive step backwards if we are wanting this to become a profession.
Sounds like FAAA wants more members which translates into more revenue. This is not about creating a profession and acting in best interests of existing FAAA members but more about growing the income stream for the body.
So can an existing adviser fall under the flexibility of the 'new entrant' to seek approval for their degree? Not all existing advisers will be an experienced adviser as per the legislation re: 10 year rule.
Are experience pathway advisers still be required to complete one or two bridging ethics subjects (as I understand previously) or these have been scrapped as well?
More dumbing one of the profession. This association needs to be abolished.
What "new entrants"?